Why Pakistan Continues to be on FATF Grey List?

(Published with permission from Peace for Asia)

A few days before its full-scale review meeting, the Financial Action Task Force (FATF) – the global money-laundering watchdog – reprimanded Pakistan for its “meagre progress” in combating terror financing and money laundering. Moreover, the FATF’s Asia-Pacific Group (APG) expressed dissatisfaction as Pakistan has so far only complied to only two of the 40 recommendations provided to address issues of anti-money laundering and combating financing terror (AML/CFT).

While Pakistan retained its position on the grey list and was given another opportunity to avoid being dragged down to the blacklist which would have invited serious global economic sanctions during these tumultuous times. However, with Pakistan’s continuous involvement along the border with Afghanistan, the future may continue to be grim in terms of the former’s FATF status aspirations. It is also believed that the concessions granted to Pakistan have a lot to do with the presumption that Pakistan will toe a supporting line with the US amidst the crucial peace deal with the Taliban. However, pieces of evidence received from multiple intelligence reports suggest that Pakistan has starting nesting terror networks in Taliban safe havens of Afghanistan.

 The Afghanistan Factor

Although Pakistan has desperately tried to erase its footprints domestically through its alleged “crackdown on terrorism”, evidence illustrates a different picture with the string of developments its agencies are engineering in the border provinces of Afghanistan. The relatively “unruled areas” along the Afghanistan-Pakistan border, particularly in the provinces of Kunar, Nangarhar, Paktia, Khost, Paktika, Zabul and Kandhar in eastern Afghanistan have enabled Pakistan to set-up terror training camps and bases, with the active support and cooperation from the Taliban, Haqqani Network (HQN) and Al Qaeda (AQ).

Among the terror groups in Afghanistan, the Islamic State Khorasan Province (IS-KP) has carried out several gruesome attacks recently including the complex attack on a Kabul maternity ward. Interestingly, even after a series of strategic defeats, the IS-KP has still continued to claim major attacks even though it does not possess the wherewithal to conduct such complex terrorist attacks by itself.

From this point, it can be assumed that a nexus has developed between the Taliban, AQ, HQN, the Lashkar-e-Taiba (LeT) and Jaish-e-Mohammad (JeM) along with the IS-KP in the region. This indicates a blurring of the distinction between identities of various terrorist outfits. Moreover, Pakistani agencies’ links with the IS-KP, the HQN, JeM and LeT remain exposed in recent times if some scattered dots are to be joined.

Huzaifa al-Bakistani, who was killed in a drone strike in Nangarhar province was an ex-LeT member, who along with his father-in-law Aijaz Ahangar (Usman al Kashmiri), an ISKP leader and ex-member of Pakistan-backed groups, namely Tehreek-ul- Mujahideen (TuM) and Harkat-ul-Mujahideen (HuM), was looking after India-centric affairs of IS. The recent Jalalabad Jail attack was a joint effort of sections affiliated with the Pakistani agencies, ISKP and HQN which worked very closely.

The threads associating Pakistani agencies with the IS-KP became more apparent after the arrest of Maulavi Abdullah Orakzai or Aslam Farooqi on April 4, 2020. This galvanized Pakistan authorities to summon the Afghan Ambassador to Pakistan to seek custody of Aslam Farooqi. Pakistan reportedly claimed Farooqi on the grounds that he had committed acts of violence against the Pakistani state. However, Kabul refused to concede to the request.

It is noteworthy that the re-location of the remaining IS-KP members to Kunar following surrender of a large number of its members in Nangarhar province to Afghan intelligence agency is seen as an attempt to give greater elbow room to the newly relocated cadres stationed in Kunar province. After a hiatus, even the LeT is also moving in to occupy territory vacated by IS-KP in Nangarhar.

These proxies, having lines of communication to Pakistan have planned on targeting Indian interests in Afghanistan such as the recent attack in the Sikh Shrine. It is interesting to note that in April, a number of Taliban leaders were reportedly targeted in an explosion at the residence of Taliban leader Hafiz Abdul Majid in Noorzai, Quetta, Pakistan during a meeting of Quetta Shura. Officers from the Pakistani agencies are believed to have been present there as well.

While Pakistan’s symbiotic relationship with Taliban in Afghanistan is a dire necessity for gaining strategic depth against India, a renewal of the Af-Pak terror nexus may not go down well for peace in this already troubled Asian region. These series of events do not bode well for Pakistan’s desire to achieve a favourable status as an advocate of counterterrorism. Moreover, this is only going to further complicate its standing in the FATF.

Conclusion

With Pakistan falling back into the grey list of the FATF, much pressure would be put on the government to deal with the situation in the long term. Pakistan is clearly treading a complex path towards its goals of escaping the FATF grey list especially with its indirect involvement in Afghanistan. Pakistan must significantly address the issues of terror support and financing. In addition, the South Asian state must adhere to the recommendations provided by the FATF if it wishes to have the slightest chance of improving its status.